From an email in this known side of the universe:
"Louis Vuitton and the Stock Market…
One day, a plain-looking man came with a pretty-looking young woman to the Louis Vuitton store in Rockwell Makati. He chose an LV bag worth P50,000 for the young woman. When it came time to pay, the man took out a checkbook and wrote out a check. The salesperson was hesitant because the couple hadn't shopped there before.
The man discerned what the salesperson was thinking and he said calmly: "I sense that you are concerned that this check may bounce, right? Today is Saturday and the banks are closed. Let me suggest that I leave the check and the handbag here. When the check clears on Monday, you can deliver the handbag to this lady. How about that?" The salesperson was reassured and gladly accepted the suggestion.
On Monday, the salesperson took the check to the nearby bank. The check was no good! The irate salesperson called up the client and complained bitterly and called him names. The client calmly told him: "What is the big deal? Neither you nor I have suffered any loss. Last Saturday night, I went to bed with that girl and had a night of terrific sex. Oh, by the way, I thank you for your cooperation. "
This story reveals the nature of the stock market. When people have high hopes for huge future returns, they lower their guard about the potential risks. This pretty girl thought that the P50,000 Louis Vuitton bag was going to come home on Monday, and so she lowered her guard. She believed that her investment in the ONS (one night stand) was worth it even though it was based upon huge and highly uncertain risks. The stock market speculators are like this pretty woman."
Although I beg to disagree. The person who wrote this is probably a stock market loser, as he/she identifies with the pretty woman who lost one night's worth of sex with a manipulative man. As with all replies to people who raise eyebrows at me and say, "why are you in stocks? That's bad! That's no good! That's Gambling". I say the same to them as with my reply to this analogy, "not all are losers like you, just because you can't hack it doesn't mean nobody can".
Unfortunately for a majority of investors that is what it is. History repeats itself.
Wow, a very nice analogy!
Wow, a very nice analogy!